On March 16th, Netflix announced its plans to possibly start cracking down on password sharing with people outside of your household. As a test, Netflix will offer Chile, Costa Rica, and Peru, the possibility to add up two members to their Netflix membership account, for an additional $2.99 dollars.
Chengyi Long, Netflix’s product innovation director, stated that Netflix “always made it easy for people who live together to share their Netflix account, with features like separate profiles and multiple streams.” However, consumers have been extending password sharing to people that don’t live with them.
In 2016 the US 9th Circuit Court of Appeals ruled that sharing an online password is a crime that can be prosecutable under the Computer Fraud and Abuse Act. This, in addition to lower subscriber numbers, are why Netflix has tried to crack down on password sharing. In March of 2021, Netflix tested a form of two-factor authentication to discourage passwords from being shared. This consisted of the account owner receiving a code by phone or email.
Ben Munson, Senior Editor of FierceVideo, said two weeks ago, “Netflix loses $6 Billion a year in revenue due to password sharing.” By doing this, Netflix is looking to potentially gain more subscribers, revenue, and new ways of monetization, while improving personalized recommendations.
Consumers are having differing opinions on Netflix’s password-sharing crackdown. Eduardo Martinez, an Accounting major student at Queens College (QC), spoke to The Knight News, saying“It’s a service they provide, so people should pay if they use it. I would say it’s fair. It’s a business, so I don’t see anything wrong about it.” However, Christopher Ramirez, a Music and Performance Education major at QC, said “It’s true they are losing money —but eventually this works for them, at the same time as advertising. Because a friend of mine let me use his and then I decided to get my own.”
However, there is no guarantee whether consumers will subscribe with their own accounts, when owners pay the fee,. Subcribers will wait as Chile, Puerto Rico, and Cuba undergo trials for updates with Netflix cracking down password sharing procedure.